Reverse-charge for import VAT from 1 July 2024
Approved amendment to the VAT Act effective from January 1, 2025 >
The Ministry of Finance of the Slovak Republic has begun the comment procedure on a draft law amending Act No. 222/2004 Coll. on VAT. Among other changes, this will introduce a reverse-charge mechanism when importing goods for some entrepreneurs from 1 July 2024.
Under the currently valid version of the law, import VAT is generally levied by the Customs Office. The new draft of the law simplifies this process by introducing a reverse-charge mechanism. This removes the obligation to pay import VAT if the taxpayer deducts the import VAT in the same period.
Conditions for applying the reverse-charge mechanism:
Entrepreneur must be a registered for VAT in Slovakia and
Must have a valid permission in Slovakia granting the status of Authorized Economic Operator (AEO) according to customs regulations.
Entrepreneurs who meet the above conditions will be required to calculate the import VAT and include it in their VAT returns for the respective period. In this case, import VAT will not be levied by the Customs Office. However, in the event of non-fulfilment of this obligation, the tax administrator (i.e. the Tax Office) may impose a penalty of up to 1.3 % of the import VAT.
Takeaway
VAT reporting will be partially extended for taxpayers who have AEO/SHS status and import goods from third countries. This change will have a significant positive impact on their cash-flow and for many entities, AEO/SHS status will be beneficial. If you require more information on this issue or on how to obtain AEO certification, please don’t hesitate to contact us.
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